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The Pricing of Experience Goods: The Example of en primeur Wine

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  • Héla Hadj Ali
  • Céline Nauges

Abstract

The market for “primeur” wine in the Bordeaux region allows producers to sell wine that is still in barrels. As with all experience goods, producers send quality signals to uninformed buyers. Using original data on Bordeaux wines, we show that the pricing behavior of producers depends to a large extent on their reputation, and much less on short-term changes in quality (as measured by experts' grades). We also find that the primeur price has an informative role, since a 10% increase in primeur price leads to a 3% increase in prices on the market for bottled wine. Copyright 2007, Oxford University Press.

Suggested Citation

  • Héla Hadj Ali & Céline Nauges, 2007. "The Pricing of Experience Goods: The Example of en primeur Wine," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 91-103.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:1:p:91-103
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.00965.x
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